Bobby Jindal on Meet the Press saying that he would turn down assistance for unemployment benefits from the stimulus package.
MR. GREGORY: All right, but let's focus on--because I want to get to some of those larger issues in just a moment. But let's focus on this. Why would you turn down $100 million for federal unemployment assistance for your state?
GOV. JINDAL: Well, let's look at the programs we turned down.
MR. GREGORY: Yeah.
GOV. JINDAL: You're talking about temporary federal money that would require a permanent change in state law.
MR. GREGORY: But it is--it's a tax break.
GOV. JINDAL: Well, it, it's--no. The $100 million we turned down was temporary federal dollars that would require us to change our unemployment laws. That would've actually raised taxes on Louisiana businesses. We as a state would've been responsible for paying for those benefits after the federal money disappeared.
Matthew Yglesias has some thoughts on why Jindal is doing this in his post Bobby Jindal's Hostages.
My other thought is that there may be a “beggar thy neighbor” strategy going on here. If Louisiana makes its unemployment benefits less generous than what’s available in other states, then maybe unemployed citizens will leave Louisiana for Texas and other neighboring states, thus creating an artificial appearance of an improved economic situation. It would be the equivalent of Mike Bloomberg fighting poverty by demolishing all the low-income housing in New York and hoping the poor people all move elsewhere.
It's hard to say whether that might be true or not but since that was pretty well the response to Hurricane Katrina nothing would surprise me from the Republicans. The other possibility is that Ray Nagin is right and it's Jindal putting his presidential ambitions before the interest of his state. Not that I'm any fan of Ray Nagin but I'd have a lot of trouble disagreeing with him on this point and that it isn't just all politics for Jindal.
Full transcript to follow.
MR. GREGORY: You have a budget shortfall in Louisiana of $2 billion. Now, under the stimulus plan by the Obama administration, you would get a cut of that. You'd get $4 billion in federal stimulus. But this is what you said on Monday about the stimulus plan: "We're going to have to review each program, each new dollar to make sure that we understand what are the conditions, what are the strings and see whether it's beneficial for Louisiana to use those dollars." And just Friday you made good on that pledge not necessarily to take the federal money, saying that you would reject almost $100 million in federal unemployment assistance. Why would you turn this money down?
GOV. JINDAL: Well, let's be clear. The best thing that Washington could do to help Louisiana and all of our states with our budgets is to get this economy moving again. I think we just have a fundamental disagreement here. I don't think the best way to do that is for the government to tax and borrow more money. I think the best thing they could've done, for example, was to cut taxes on things like capital gains, the lower tax brackets, to get the private sector spending again. I think they had a provision the net operating losses to help small businesses. Unfortunately, they slimmed that down. They could've done some things on a real energy policy. If all they do is borrow federal money and give it to the states, all we're really doing is delaying the inevitable. We're eventually going to have to make these hard choices anyway. In Louisiana we made midyear reductions, $241 million. We're going to have to do more with less. What would be more helpful from Washington is less unnecessary spending. How does $300 million for federal cars, $50 million for the National Endowment for the Arts, how is spending like that going to help our economy? How's that stimulus?
MR. GREGORY: All right, but let's focus on--because I want to get to some of those larger issues in just a moment. But let's focus on this. Why would you turn down $100 million for federal unemployment assistance for your state?
GOV. JINDAL: Well, let's look at the programs we turned down.
MR. GREGORY: Yeah.
GOV. JINDAL: You're talking about temporary federal money that would require a permanent change in state law.
MR. GREGORY: But it is--it's a tax break.
GOV. JINDAL: Well, it, it's--no. The $100 million we turned down was temporary federal dollars that would require us to change our unemployment laws. That would've actually raised taxes on Louisiana businesses. We as a state would've been responsible for paying for those benefits after the federal money disappeared.
MR. GREGORY: All right, but the Democratic senator from Louisiana, Mary Landrieu, says you're wrong. This is how it was reported in The Times-Picayune Saturday: "Senator Landrieu disputed the governor's interpretation and said the new unemployment benefits are designed to be temporary. `The bill is an emergency measure designed to provide extra help during these extraordinarily tough times,' Landrieu said. `To characterize this provision as a "tax increase on Louisiana businesses" is inaccurate.'" Her point being, you could insert a sunset clause when this has to go away, but it would certainly be beneficial at a time when you're in economic stress.
GOV. JINDAL: That's great, except the federal law, if you actually read the bill--and I know it was 1,000 pages, and I know they got it, you know, at midnight, or hours before they voted on it--if you actually read the bill, there's one problem with that. The word permanent is in the bill. It requires the state to make a permanent change in our law. Law B--our employer group agrees with me. They say, "Yes, this will result an increase in taxes on our businesses, this will result in a permanent obligation on the state of Louisiana." It would be like spending $1 to get a dime. Why would we take temporary federal dollars if we're going to end up having a permanent program?
And here's the problem. So many of these things that are called temporary programs end up being permanent government programs. But this one's crystal clear, black and white letter law. The federal stimulus bill says it has to be a permanent change in state law if you take this state money. And so within three years the federal money's gone, we've got now a permanent change in our laws, we have to pay for it, our businesses pay for it. I don't think it makes sense to be raising taxes on Louisiana businesses during these economically challenging times. And what it shows is what we're going to do in the stimulus is we're going to look at every program, every dollar. If it makes sense for Louisiana, makes sense for our taxpayers, we'll use those programs and dollars. If it doesn't, like on Friday we said, "This doesn't make sense for us. This is not a good deal for us." It makes--my job is to represent Louisiana's taxpayers. Makes no sense for us to take temporary federal dollars and create permanent state obligations.
MR. GREGORY: Are there other parts of this stimulus money that would go to Louisiana that you will reject?
GOV. JINDAL: Well, we're going to continue to do our process. On Friday we said, for example, we are going to take--we are going to recommend the legislature that we take the road money. These are dollars the federal government was going to spend on roads anyway. In my view they're going to spend it a little more quickly than they would have otherwise. Louisiana's still a donor state. We pay more in federal gasoline taxes than we get back. So on the same day we said we're not taking the $100 million in the unemployment, we said we will take the road money. We're going to look at every provision, see what's good for the state, see what's not, see what strings are attached. But the reality is the bigger philosophical point is this, I just have a fundamental disagreement with this package. When it was originally proposed, it was talked about as--the president originally talked about tax--targeted tax cuts...
MR. GREGORY: Right.
GOV. JINDAL: ...as well as infrastructure investment.
MR. GREGORY: But a third of this package is made up of tax cuts.
GOV. JINDAL: Well, but you look at the provisions that would get our economy moving--for example, they--both the House and the Senate had more generous versions for the small businesses, the net operating losses, the carryforwards. They get into conference and it ends up smaller than where both houses started.
MR. GREGORY: Mm-hmm.
GOV. JINDAL: Other spending started out, like the, the magnetic-lev train subsidy started out smaller and ended up larger than what both chambers passed in conference, $8 billion. You know, now they're talking about spending billions of that to build a train from Disneyland to Las Vegas. There was so much wasteful spending here. I think the president had a chance, if he had worked with the Republicans--instead of allowing Speaker Pelosi to write this bill, if he had worked with the Republicans to say, "Let's really invest in infrastructure, let's do targeted temporary spending, let's do some tax cuts, let's get the economy moving." I don't think we're going to solve our economic challenges through government spending.
